Friday, July 3, 2015

IPS Civics Summitt: Critical Condition

If you are going to be in the Modesto, California area the last weekend in July, you will not want to miss this year's Civics Summit hosted by the Institute for Principle Studies. The theme for this year is as timely as today's headlines: our health care mess.
We know that healthcare is expensive, and it affects us all on a daily basis. In fact, despite major attempts to reduce costs, the United States has some of the highest healthcare costs in the world. The real question is: why? A thorough study of both economics and biblical principles can give us insight into why current policies are not working, and what better alternatives exist. 
I will again be presenting lectures, speaking about the Biblical foundations of economics, the economics of the third party payer systems, why middle-of-the-road policy so often leads to socialism, and why health care is so expensive. For more information and to register click here.

Wednesday, July 1, 2015

Another Reason To Be Happy Hamilton Is Leaving the Ten Dollar Bill

When the Federal Reserve System Chairman who helped convince the intelligentsia that the only thing we have to fear is deflation itself and gave us quantitative easing for who knows how long

says he is "appalled" at the prospect of Hamilton's portrait leaving the ten dollar bill.

In a reversal of the old Debbie Boone line, it must be right if Bernanke feels it is so wrong. Bernanke's case for Hamilton is a list of how Hamilton worked to bring more of the economy under the sphere of the state and its central bank. That has not worked out so well.

Sunday, June 28, 2015

Is Private Propety Biblical?

Anne Bradley of the Institute for Faith, Work, and Economics explains why the answer is yes.

Bradley cites various Scriptural passages and our theological tradition. She also points us to a better understanding of social justice. I have also written on this issue in my book Foundations of Economics: A Christian View and in an article, "The Scriptural Case for Private Property and a Free Economy" in the Aeropagus Journal.

Friday, June 26, 2015

Fixing Problems Requires Understanding Them

Dambisa Moyo thinks that one of the problems of the economics profession is that we spend too much fighting and not enough time actually fixing problems, especially regarding poverty and economic development. Her solution is to put down ideology and pragmatically embrace the virtues of any and all systems of economic thought.

She uses the competing ideas of Hayek and Keynes as a framework through which to illustrate her point. He perspective is demonstrated by the pragmatism she thinks we need:
A balanced economic approach that draws on the Hayekian incentive-based prescriptions, but also recognizes the critical role of strong central governments to act effectively in times of crisis, their role in boosting aggregate demand, putting to work underutilized resources and clearing markets when they won’t clear themselves.

While Moyo's goals are laudible--economics serves people as it provides them guidance for ameliorating economic problems--her prescription will achieve her ends only if both Keynesian and Austrian theory are relevant and applicable in different circumstances. There a plenty of reasons to question the soundness of Keynesian theory and the success of Keynesian economic policy. It may very well be that we need to fight the intellectual battles to discover and establish true theory, so we can then rightly apply it in economic policy. Formulating economic policy based on bad economic theory is a recipe for doing more harm than good.

Wednesday, June 24, 2015

Supreme Court Finds in Favor of Private Property?

As hard as it is to believe, that seems to be the case. Such a ruling is something to celebrate on our upcoming Independence Day. This Monday the Supreme Court ruled that a government program meant to increase raisin prices by keeping some of them off the market amounted to an unconstitutional taking of private property by the government. Let us hope that ruling may be used as a precedent spawning further rulings identifying that other federal regulations that constrain entrepreneurs from using their factors of production as they see fit is also unconstitutional. Not only do such regulations violate the Christian ethic of private property and makes us relatively impoverished by hampering the market division of labor.

Sunday, June 21, 2015

What Is Economic Freedom and Why Should We Care?

Anne Bradley from the Institute for Faith, Work, and Economics explains why.

The short answer is that it enables human flourishing. For a more in-depth exploration of the topic, see Bradley's paper, "Five Reasons Christians Should Embrace Economic Freedom."

Friday, June 19, 2015

Economic Wisdom on Renewable Fuel Standards

From Timothy Terrell posting at the Corwall Alliance. Terrel comes to the issue of government mandated renewable fuel standards from the same framework I use in my book, Foundations of Economics: A Christian View, and I expressed in my most recent op-ed about EPA Clean Energy Plan. Economics recognizes that prices are indications of relative scarcity. Therefore, when entrepreneurs arrange production according to profit and loss, they most strictly economize resources that are higher priced. Forcing the move to higher-priced alternatives make no economic sense for entrepreneurs seeking to reap profits. Importantly, they also make no sense for a society seeking to enjoy sustainable economic development. Terrell notes that such mandates make for bad stewardship.

As he explains,
Trying to force the adoption of another energy source, whether that is ethanol, wind energy, solar, or something else, means spending something valuable to conserve something cheap. Using “renewable” ethanol means using valuable farmland, water for irrigation, fertilizer (some of which is petroleum derived), tractors and tractor fuel for planting and harvesting, trucks for transportation of corn, fuel and water for distillation plants, and human labor. Cheaper energy sources are right under our noses.

But using ethanol means we’ll have more oil to use later, right? Yes. It means that we’ll use up the existing petroleum reserves at a somewhat slower rate, and will shift to other energy sources a little later. But it also means sacrificing all those valuable resources in the present—all the food that could have been grown on the farmland, all the water which could have irrigated other crops or increased stream flow for fishing and recreation, all the tractors and other vehicles, and the rest. It means, in short, less economic development now. It is economic development that gives us the tools to extract oil from harder-to-reach places, gives us innovations that increase the efficiency with which we use oil, and which will eventually replace petroleum. And it is economic development that saves lives. It is economic development from lower-cost energy today that reduces infant mortality and other causes of death, so that children have the chance to grow up, get an education, and become the innovators of the future.